Honda steps up while BMW steps away from oil-burners.

Straddling the great diesel divide

Just as some of its rivals are questioning the validity of diesel passenger cars, Honda Australia is taking the oily plunge. After years of arguing the hybrid case, Honda will launch a turbo diesel version of the Civic hatchback next year, with an oil-burning CR-V compact SUV also due before the end of that year.

Honda Australia director Stephen Collins says the company plans to add more diesels and hybrids as the opportunities arise.

"We are not ruling out diesel for other segments," he says. "We are also looking at a number of hybrid options ... in other segments. Nothing can be confirmed."

Conversely, luxury brand BMW has dropped some turbo diesel models for Australia and is predicting a rise in petrol engine sales as more fuel-efficient direct-injection turbos are launched.

"The performance improvement from the direct-injection turbo engines might sway more people back to the petrol," BMW product and market planning manager Toni Andreevski told Drive.

Subaru Australia managing director Nick Senior hosed down the prospect of a turbo diesel boxer engine making its way across the divide from the company's soft-roaders to its passenger car line-up.

"I don't see at the moment, with the advances we've made with the new Impreza, that a diesel makes any sense, not when you are returning the fuel figures that we have got," Senior said at last week's Impreza launch.

However, not every car maker is moving away from diesel. Toyota, an even stouter advocate than Honda of hybrid over diesel, signed a deal with BMW recently to gain access to turbo diesel engines primarily for European markets.

Collins acknowledges diesel will not be a sales powerhouse, which leads to the question — why bother?

"We know petrol is going to be the biggest chunk of our business but dealers and customers have been calling for diesel for a while and the reality is, we have been slower than most to react," he says. "But we need to get in that space."

In 2010, private sales of diesel-powered cars dipped by 11.1 per cent to 19,908. The sale of petrol-powered passenger cars to private passengers dropped 4 per cent last year but still totalled a mammoth 285,026.

The turbo diesel in the Civic hatch is a new "Earth Dreams" 1.6-litre expected to average less than 4.0 litres per 100 kilometres. The CR-V's diesel engine is yet to be confirmed. Collins insists Honda's support of diesel should not be interpreted as a shift from hybrid.

"We think the technology is good for customers and it's affordable generally, compared to some other technologies out there," he says. "So we are going to persevere and we think there are better opportunities. We can do a lot better in the hybrid space."